Money is an important resource in our lives. It is an object we manage to provide for our life needs. We manage money by earning income, spending, saving, and sharing.
Sometimes we use credit as a source of income. That means we are using someone else’s money to meet our needs. Our creditors can be financial institutions. Sometimes creditors are our family or friends. Sometimes there is a legal contract stating the terms of agreement. Sometimes there is not. In either case, debt is an obligation to be repaid.
When facing financial uncertainty, managing debt is an important task.
It can be hard to know what to do next when we may not have enough financial resources to meet our basic needs and financial obligations. But we can find our way through the uncertainty if we are mindful about how we do what we do.
We can find our way through by focusing on another one of our twelve character traits which is belief. What we believe influences how we form what we do. We can create a healthy response to our financial situation when we accept and own our individual right of identifying what we need to move forward.
If others are involved, it is important to cooperate with them when determining what is needed. If we find ourselves overextended with debt, consciously taking ownership for working with our creditors can lead to better outcomes.
We may feel afraid to afraid to face our debt. In “Making Ends Meet”, we focused on the character trait of confidence. We can face our fear caused by financial uncertainty by calling on the strength of confidence.
We bring forth our courage to become aware of how to use our personal power and combine it with the power of our creditors to meet our mutual needs. When all involved in a common need come together to identify what is needed, mutually satisfying solutions can be fouund.
In “Managing Debt”, our focus is on the character trait of belief. What we believe underlies how we form what we do. When we don’t know what to do, we might stay stuck and do nothing. Doing nothing such as avoiding opening bills only adds to our difficulties. When we do nothing, we give the power for identifying what will be done to our creditors.
By calling on the character trait of belief, we can receive the guidance to know what to do next. When we become still, focus our attention in, and connect with our creative capacity through prayer (asking) and meditation (listening), we receive guidance for what to do next. We come to know how to use our personal power to form the next step to keep us moving forward.
There are specific actions we can take to manage our debt. We can become aware of what our income and expenses are. We can become aware of what we owe.
We may find that we have enough money to meet our basic needs and pay our bills. We may be able to meet our basic needs but only make minimum monthly payments to our creditors.
If our expenses are greater than our income, we can create a plan to determine which debt to pay when. Once we have that information, we can communicate with our creditors. By joining our power with the power of our creditors it is possible to create a mutually acceptable plan to move forward.
It is important that all involved have a voice in determining the solution. As an individual, I have the voice in determining and saying what I can pay now. The creditor has the final say for what he or she will accept. If you approach each creditor with the facts of your situation, it is likely that you can work out a mutually agreeable plan with each one. If your debt is too overwhelming, you may need to connect with someone such as a credit counselor.
Inventory What You Owe
Gathering and presenting your financial data is the first step in determining what to do next. Since your income has dropped, you may want to consider avoiding the use of more credit unless absolutely necessary to meet your basic needs.
You can use the following worksheet as a guide to take an inventory of your debts so you can develop a plan for what you can realistically do.
Click on the Debt Inventory link below:
For each debt identify the following information:
1. Name of the company you owe
2. The total balance owed
3. The payment due date
4. The minimum monthly payment
5. The date last paid.
6. Is the note secured by collateral? If so, what is the collateral?
7. If you are behind, how many payments are you behind?
8. How many payments do you have left until the note is paid off?
Once you have an inventory of what you have the ability to pay and your debts, you have the information you need to cooperate with your creditors to develop a plan. Taking positive actions keep us moving through this time of uncertainty.